By Tim Worstall
There are of course two different ways you can read this. Alexis Tsipras, the Greek Prime Minister, has reorganised his cabinet, dropping most of the hard left wing types or moving them away from jobs with economic influence. In response Greek bonds jumped in price and the financial markets generally celebrated. The first way we can read this is that getting rid of the left wingers leaves the Greek economy and people even more open to rapine by those markets and financiers and thus the celebratory reaction. This is not how I view it although there will undoubtedly be those who do. The other manner is to observe that, given the situation Greece is in, this is the only sensible thing to do and the reaction is almost relief at the idea that there might be some good economic policy in that country. This is the way I do think about it.
For, let’s face it, the track record of hard left wing economic policy just ain’t all that good recently, is it?
The Greek prime minister, Alexis Tsipras, has reshuffled his government to boost bailout reforms in the hope of getting the EU to agree to critical debt relief by the end of the year.
Heralding a new political era for his country, the embattled leader said on Sunday the time had come to expedite measures demanded by international creditors and “turn the page”. Hardline ministers who had criticised policies including privatisations were dumped for moderate technocrats in what was interpreted as a further shift to the centre by the man who once personified the hope of Europe’s radical left.
So much for that radical left and their hopes of course. Back a couple of years when Syriza was first elected and it looked like Podemos was going to sweep all before it in Spain it was still very silly indeed to be following hard left ideas. Those dreams of a revolution over the capitalist state. But Maduro and Bolivarian socialism hadn’t quite managed to tip Venezuela entirely into destitution and despondency. And there was a lot of looking to Venezuela as an inspiration by both those groups–as well as the usual hangers on of the left cheering on all three. I think specifically about Owen Jones who variously turned up to cheer for his team, from memory, at elections in Greece, Venezuela and Spain. Now the only one he continues to mention in his columns is Podemos in Spain–presumably because they’ve not actually come to power and been able to show how bad their economic ideas are:
Greek Prime Minister Alexis Tsipras promised “brighter days” on Saturday after a cabinet reshuffle aimed at speeding up reforms Athens has agreed to implement under its latest international bailout deal and to shore up his government’s popularity.
Well, yes, get rid of the lefties, expunge those with no economic ideas more modern than Das Kapital and things will look brighter:
Moves taken on Sunday by Alexis Tsipras, the Greek prime minister, to cleanse his cabinet of hard-left ministers has prompted a surge in market confidence, with bonds soaring to three-month highs on Monday morning.
Which is about right. Take the Teenage Trots out of government (there was even a sprinkling of Maoists in Syriza at one point) and get the adults into office and things will start to look better almost immediately.
The big question we’ve got to ask ourselves though is why do they keep on thinking that this time will be different? We have a spectrum of economic policies which work, by work we mean “make the average person richer.” This ranges from something close to laissez faire free marketry like Hong Kong all the way through to high tax and high redistribution free marketry a la Nordics. Anything which isn’t free marketry does not work and no one has ever made a non-market system achieve that desired goal–making the average person richer.
So why is it that people keep dreaming that it will be possible, get themselves elected and then prove that it isn’t?